[WEEKLY FOCUS] How might Naver-Line Yahoo case unfold?

'라인사태' 외교 문제로 번지나 향후 예상되는 우려점은?

South Korean online platform giant Naver has been facing pressure from the Japanese government to sell its shares in Tokyo-based Line Yahoo, the operator of Japan's popular messaging app.
And it no longer seems to be just a business issue.
Joining me in the studio to discuss is our business correspondent Park Kun-woo.
Welcome, Kun-woo.

Thank you for having me.

So Kun-woo, how has this issue expanded into a political and diplomatic problem?

First of all, the Japanese government gave administrative guidance to Line Yahoo twice in 2024 advising it to reorganize its shareholding structure in order to prevent security problems.
Japan's main concern is a Korean company having access as a shareholder to the personal information of Japanese users of LINE due to a data leak last year, making it a political issue here in South Korea.

Opposition parties criticized the government for taking a passive attitude instead of speaking up for a Korean company, while the ruling People Power Party said opposition parties were driving anti-Japanese sentiment.
Since then the government has delivered a stronger message saying that it would do all that it can to support Naver.
“The government’s response has so far reflected Naver’s position as much as possible, and it will continue to support Naver with any future developments. We will respond firmly and strongly to unfair measures that go against a Korean company's stance."

What has been Japan's reaction?

Actually on Tuesday, the Japanese government reiterated that its aim is to prevent similar cases from happening again, but also said reorganization of the shareholding structure is still on the agenda.
One expert shared his thoughts on why Japan issued the administrative guidance.

"Expectations that the Japanese shareholder would become the majority shareholder over Naver led to a sudden rise of 7 percent in the approval rating for the Japanese government."

He added it could be part of a political strategy by Prime Minister Fumio Kishida and the ruling party to extend their terms after the elections later this year.

Now Kun-woo, tell us more about what has happened in this "LINE case."

Of course Yoo-jin. So, if you take a look at the screen
Line Yahoo's major shareholder, A-holdings, is a joint venture between Naver and Japan's SoftBank with an even split of 50:50.
And that's quite unusual as joint ventures usually proportion shares in order to avoid a situation where one firm could take full control.
One other thing is that the messenger app LINE is popular among Japanese people with a total of around 96 million users, meaning 8 out of 10 Japanese people are using this app.
And LINE has been expanding its business to become a provider of news, music, digital payment, and more.
In November last year, there was a personal information leak involving more than 500-thousand users.
As a result, Japan directed Line Yahoo in March to review its capital relationship with Naver to prevent it from happening again.
Though Naver responded with a report containing preventive measures, Japan gave administrative guidance for an unprecedented second time in April.
So, Naver has to submit a report again to the Japanese government by July 1st.
That's different from what happened with Nippon Telegraph and Telephone Corporation or NTT, which had a leak on a much larger scale, with over 9 million users affected, between 2013 and 2023.
In that case, the Japanese government accepted improvement measures proposed by NTT.

Kun-woo, what are the predictions for Naver's next move? And what are some concerns?

So Yoo-jin, Naver has already announced that it is open to all possibilities including selling shares to SoftBank so we'll have to wait and see if the company will actually do so.
Pundits say Naver's value within Line Yahoo is around 8 trillion won or over 5-point-8 billion U.S. dollars, and a sale would allow Naver to invest in the AI sector where they have been recently focusing.
Naver's labor union expressed concern over job cuts and the loss of company tech and know-how if it sells.
But the government recently said selling shares will not be included in the report to be submitted in July, meaning Naver has some more time to consider the issue.
And apart from that, an expert said selling shares can actually cause a bigger problem...

#SouthKorea #Japan #Naver #LINE #대한민국 #일본 #기업 #네이버 #라인 #Arirang_News #아리랑뉴스

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2024-05-18, 12:00 (KST)

Видео [WEEKLY FOCUS] How might Naver-Line Yahoo case unfold? канала Arirang News